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The side that has stronger argument.
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Explanation of Solution
The Production Tax Credit (PTC) is defined as a federal incentive which provides financial support for the development of renewable energy facilities.
Opponents of the wind energy tax credit argue that the market should determine the future of alternative energy sources. Supporters argue that government has historically supported the oil and coal industries through subsidies and that alternative energy reduces what society pays for health and the environment.
The side of supporters has a strong argument as governments support in the form of subsidies is required for the society.
There are various reasons which justify the role of the government in renewable energy investment:
- Energy security
- Afford ability
- Potential for job creation
- Future economic strategic positioning
- Addressing environmental and other externalities.
As the government (a) Gives direct grants and investments (b) gives loans and loan guarantees (c) Tax incentive.
The other argument that is “Leave it to the market” states:
The role of the government should be less; they argue that actually the current prices closely reflects the
As the costs of Present Value technology energy storage, and other clean energy technology and wind turbines have decreased with time, in their own right they have become competitive and it would be inefficient on the part of the government to invest at an early stage in uneconomic technologies.
According to the advocates of this theory state that in these scenario private investors knows better what to invest in for the long term.
Second argument states that the external cost is unsure, and the costs of renewable energy could be greater or equal as compared to the traditional technologies which are fossil-fuel based.
Conclusion:
So the supporter’s viewpoint is has stronger argument.
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Chapter 12 Solutions
Engineering Economic Analysis
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